Nokia sales warning hits suppliers

Nokia’s shares have plummeted, following a warning that sales for the quarter are likely to be well short of the €6.6 billion it was predicting, and causing a knock-on effect on the company’s suppliers.

While Nokia’s still the biggest smartphone manufacturer in the world, its market share is falling. And its announcement that it’s to discontinue the Symbian operating system has been seen as a little premature, given that it still has to bring any Windows Phone models to market. It expects to start shipping these in the fourth quarter this year.

In the meantime, the company says, operating margins from April to June will be “substantially below” the six to nine percent it was previously forecasting.

And the announcement is bad news, too, for Nokia’s suppliers. The company’s one of the biggest customers for chipmaker CSR, for example, and is now one of the biggest losers on the FTSE exchange.

According to Reuters, Numis analysts have now slashed their recommendation on the company from “buy” to “add”.

“CSR should benefit from some other customers like Samsung gaining share from Nokia and RIM in smartphones, however this is not likely to completely offset the severe pressure in the feature phone category, where CSR generates the majority of its handset revenues,” it says.

ARM, too, is feeling the pain. Its shares have also dived, and are now hovering at around 557p. This’ll be a big disappointment for the company, one would imagine, as it must have hoped that this week’s sneak preview of  Windows 8 – which will run on ARM’s architecture – would have given things a bit of a boost.